Leaky homes: 'Byron Avenue'

Where Council inspectors have failed to pick up deficiencies during a building’s construction, a Council is liable for the cost of repair even where it later has second thoughts and refuses to issue a certificate of compliance.

North Shore City was held liable in negligence over inadequate inspections during construction of a 14 unit residential development in Takapuna. The Council made nearly 100 inspection visits in the course of construction and was on the brink of issuing a certificate of compliance on completion when it was advised parts of the exterior plaster cladding were bubbling. This indicated moisture was leaking through joints between windows and the cladding. No certificate was issued.

The Court ruled that purchasers are entitled to rely on a Council to properly carry out progress inspections. This ensures faults can be identified and remedied before the building is closed in.

Purchasers were entitled to recover damages from the Council for cost of repairs.

In some instances, purchasers were aware there were cladding problems before they were legally committed to the transaction. These purchasers were held partly to blame for their losses and damages were reduced by up to 25 per cent for contributory negligence.

In one case, the purchaser’s lawyer had been negligent in failing to tell her that she could get information from the Council about the issue of a certificate of compliance. The lawyer was negligent, but the purchaser had to accept responsibility for this negligence and also accept a reduction of 25 per cent in the damages payable.

‘Byron Avenue’ – Court of Appeal (22.03.10)

08.10.003